Community consultation for the new Northern prison site will begin by the end of this month, Attorney-General Elise Archer says.
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Ten possible sites are being assessed for the $270-million project.
The new 270-bed prison is expected to relieve pressure on Risdon Prison, with Ms Archer previously saying it was important because 46 per cent of the prison population was from the North.
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The prison will be built over two stages, with the first stage due to be completed in five years and house 140 prisoners.
It is estimated the construction and running of the prison will create 3375 direct and indirect jobs.
The Liberals promised to build a Northern prison during the 2018 state election.
The first stage of the prison is due to be completed in the next five years.
